Ed Miliband accused of U-turn over £6,000 tuition fee pledge

Labour leader justifies policy as an attack on ‘fast-buck’ culture but critics say the change would not help poorer students A pledge by Ed Miliband, which would see the maximum university tuition fee cut by a third to £6,000, came under fire from across the political spectrum on the first day of the Labour conference. Amid confusion over whether the party would still advocate a graduate tax at the next general election, the National Union of Students joined forces with the coalition to warn that the change would do nothing to benefit poorer students. Miliband received a rough ride after he moved to reach out to disillusioned Liberal Democrat voters by announcing, at the annual conference, held in Liverpool for the first time, a plan for the cap on student tuition fees to be lowered from £9,000 to £6,000. The £800m cost of the fees change, outlined by the Labour leader in an Observer interview , would be paid in two ways. A cut in corporation tax for the banks would be reversed. (George Osborne announced in the budget in March that the tax would drop from 28% in 2010-11 to 23% in 2014-15.) And graduates later earning more than £65,000 would have to pay higher interest rates on their loans. Miliband told The Andrew Marr Show on BBC1 that the change would help Britain move away from the “fast-buck” economy. “We face big choices and tough choices in this country. Do we cut taxes for financial services, do we carry on with a fast-buck economy, or do we change course? Do we say invest in the future of our young people? I think we’ve got to put an end to the fast-buck era. “I don’t think the priority for Britain is to cut taxes for financial services, and it’s a big choice … a big difference between ourselves and the government.” The Labour leader was accused overnight of a U-turn, since he opposed an increase in tuition fees last year and advocated a graduate tax. Coalition ministers pointed out that the new policy was a step back from a graduate tax and would lead to a doubling of fees from the amount bequeathed by Labour when it left office. David Willetts, the universities minister, said: “Ed Miliband has now accepted that tuition fees should be doubled to £6,000 a year. He has consistently supported a graduate tax and Labour MPs were whipped to vote against higher fees at the end of last year. This monumental U-turn is evidence of weak leadership.” Miliband explained that the new policy was designed to form the centrepiece of a manifesto if an early election were held. He indicated that it remained his ambition to move towards endorsing a graduate tax by the time of the next general election if the present parliament lasted until 2015. “If we can do more by the time of the election [in 2015], we will,” he told the BBC. “But this is an important first step.” Willetts questioned whether the cut in the cap would benefit poorer students. In a letter to John Denham, the shadow business secretary, Willetts said: “Will graduates enjoy lower monthly repayments under your proposals? As you do not appear to be planning any changes to the repayment terms, it seems that monthly repayments will remain the same. “Moreover, there will be no benefit to the lowest-earning graduates because their entire outstanding debt is written off after 30 years, irrespective of its size. So your proposal jeopardises the funding of universities without reducing the monthly repayments paid by graduates.” Liam Burns, president of the National Union of Students, echoed the remarks by the Tory minister when he told Sky News that the changes would do nothing to help poorer students and would end up benefiting more affluent students. Burns said: “This was a long-term policy. You have to think who this benefits. Because of the 30-year cut-off – in which your debt would be written off under the system being proposed – actually taking the cap down to £6,000 would benefit the richest the most.” The NUS judgment was based on figures which showed that the alteration made no difference for students earning under £35,000. Under a £9,000 or £6,000 cap, students earning under £35,000 would be exempted from paying off the full debt. One coalition source said: “The winners from this policy, relative to government policy, are the highest-paid graduates because they are the group that pay off the whole debt. If you cut the total debt they enjoy benefit.” Labour sources insisted there was no confusion about Miliband’s commitment to endorsing a graduate tax, regarded by the Labour leader as being more fair. “This is a step towards a graduate tax,” one source said. “We would like to go further but we can only do what is affordable.” Denham said: “What we wanted to do was to show there is an alternative available to this government now that would cap fees – [it] would mean that universities would get all the money they have been expecting to get under the new system. It would also get away from this very pernicious ‘core and margins’ system where 60,000 places would get auctioned off. “It gives a sense of the direction of travel we want to go in for the next election … we are proposing a more progressive payment system because we are saying there should be lower fees and we are turning our back on some of the market the Tories are trying to put into place. But the direction of travel, we have always said, should be towards a graduate tax … [which] could only take place over a period of time.” Student finance Ed Miliband Higher education Labour conference 2011 Liberal-Conservative coalition Labour Labour conference Students Nicholas Watt guardian.co.uk

Posted by on September 25, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.